Homeowners insurance is a surprisingly comprehensive policy. The insurance offers compensation for dwellings, their contents, and their occupants when any of them get damaged by one of several “perils,” both natural and otherwise. These include fire and lightning, hail, explosions, riots, vehicle and aircraft collisions, smoke, vandalism, theft, and even damage to the roof caused by snow and ice. Different policy types cover damages differently, however, and you should know just how comprehensive a policy is before you choose which one you want.
1. Homeowners Broad Form
The basic broad form works well with single-building properties, such as most normal homes and townhomes. The insurance coverage sets a specific payout value for dwelling repairs, other buildings (like sheds) get 10 percent of that coverage, personal property (the belongings inside) have 50 percent the coverage, loss of use (hotel and storage payments as the building is repaired) is 20 percent, personal liability (someone sues you) is a minimum $100,000, and medical payments to others is at least $1,000.
2. Homeowners Special Form
The homeowners special form is mostly the same as the broad form, but the difference is the “open perils” system. Instead of putting a list of covered perils on the insurance policy, the special form lists the perils it doesn’t cover (which probably includes flooding). This way, if something unique and unexpected happens to the dwelling, the homeowners insurance still covers it. The personal property inside, however, is still only covered by specific perils.
3. Homeowners Contents Broad Form
The big difference with this form is the fact that it doesn’t cover damage to the dwelling. This is what’s called “renter’s insurance,” since renters hardly have to worry about the building they live in. This insurance can be much cheaper than the normal broad form, for obvious reasons.
4. Homeowners Comprehensive Form
This form is very similar to the special form, especially in how they both use the “open perils” system. However, the comprehensive form adds to the special form by extending the open perils to personal property.
5. Homeowners Unit-Owners Form
This form is for condominium owners, and so it’s something of a compromise between the broad form and the contents broad form. As such, while the policy provides some dwelling coverage to help repair damaged walls or ceilings, it’s mostly focused on personal property.
6. Homeowners Modified Coverage Form
This form uses a modified version of the broad form meant specifically for old houses. If you live in an old home that costs more to build and repair than it does to replace, you can use this policy to get actual cash value payments.
One final word: most homeowners insurance policies don’t cover floods, mudslides, and earthquakes, since not every home sits in an at-risk area and that’s just as true in North Carolina. If you do live in one of these areas, you should make sure you add its coverage to the usual homeowners or renters coverage. Contact us for a Raleigh home insurance quote at 919.926.7166.
